Clash over Poirot rights caps growing tensions between PBS, Acorn

A breakdown in negotiations with Acorn TV resulted in PBS’s Masterpiece missing out on the final episodes of Poirot. (Photo: ITV Studios)

Acorn TV, the upstart streaming service specializing in British television, is still a tiny operation, with about 115,000 paid subscribers. Nonetheless, its fast growth is causing outsized concern at PBS and Masterpiece, public television’s longstanding home for British drama.

Brewing tensions came to a head over rights to the final three episodes in David Suchet’s marathon 70-program portrayal of Agatha Christie’s Belgian detective Hercule Poirot. As a result of the rift, Acorn TV premiered the episodes to its streaming subscribers in August and syndicated them directly to local public TV stations, with Masterpiece nowhere in the picture. The broadcast window for the finale’s broadcast opens Nov. 1, coinciding with the DVD and Blu-ray release.

Acorn TV is just one of the operations of RLJ Entertainment, whose Acorn Media is primarily in the business of distributing DVDs, Blu-ray discs and downloads of British television properties. Acorn officials describe Masterpiece as a potentially valuable partner for the programs for which the company owns rights. “For us, ultimately, we are looking to bring our programs to as many households as possible, and we see Masterpiece Theatre as a great outlet for them,” said Miguel Penella, chief executive of RLJ Entertainment.

Masterpiece EP Rebecca Eaton was not as sanguine. The PBS and Acorn business plans “have been growing more disparate,” she said. “It’s important to be aware of what everybody’s long game is.”

Penella

Masterpiece, the first U.S. home of the vast majority of previous Poirot episodes, contractually had first dibs on the shows, provided it met the same commercial terms as for previous episodes. But in late 2011, when then–rights holder ITV offered the final five episodes, Masterpiece took only two, following its routine practice of buying shows as needed and as its budget allowed.

In the meantime, Acorn Media purchased a majority stake in the Agatha Christie estate and learned that production of the last three shows was in danger because the Masterpiece deal wasn’t complete. The company stepped in and bought up the rights, assuming that it would resell them to Masterpiece, said Penella via an Acorn spokesperson.

But the rights negotiations were complicated by each party’s growing interest in digital streaming. Acorn TV, a subscriber-based streaming service launched in July 2011, had been gaining traction with British TV fans. PBS, meanwhile, was working to develop its own video-on-demand service as a premium for station membership.

In late 2013, negotiations over the final Poirot episodes fell apart, partly due to disagreements over digital streaming. In the end, the detective franchise that Masterpiece had built over 25 years went to its new rival. Acorn Media got to trumpet the episodes’ premiere on its new streaming service, but it missed out on the much wider exposure that would have been gained from a broadcast premiere on Masterpiece, which in 2014 is averaging a weekly audience of 6.9 million viewers.

“It still benefits them to have a program on PBS,” Eaton said. “It’s basically an ad for their DVDs.”

Each side says the other made unreasonable demands. Eaton blamed Acorn’s insistence on keeping the premiere of the episodes for its own streaming service. “Both PBS and Masterpiece objected to that,” she said, adding that the show and PBS require exclusivity and first digital and broadcast release of any property. In addition, she said, Acorn’s negotiating position on future streaming rights was problematic, because Masterpiece and PBS are “very interested in acquiring all rights to shows that air on PBS.” A broadcast on Masterpiece “draws a tremendous audience and is a tremendous showplace for the next life of a show,” she said.

But Penella said Acorn was forced to turn to its own streaming service for the premiere after the two sides were unable to come to an agreement, with streaming rights just one contentious point in a “complicated lengthy process” during which multiple alternatives were discussed. “They wanted more rights for a lower price, and that presented a problem,” said Penella, citing the productions’ high quality and costs. “There’s a budget that we have to cover,” he said.

Recognizing that Poirot still needed a broadcast premiere to boost awareness of the final season, Acorn syndicated the episodes directly to public TV stations.

Local programmers went for the syndication package. Clearance currently stands at a healthy 83.5 percent of the country. “We’ve gotten a really good reception,” said Dan Hamby, a consultant for RLJ Entertainment. An August pledge special Being Poirot reached nearly 70 percent clearance. Acorn also produced and self-distributed a second show for December pledge.

Superserving British TV fans

For stations that program their own line-ups of British drama, Acorn TV is proving to be a good testing ground for shows that ultimately prove popular for local stations, Hamby said. PBS passed on the Australian Miss Fisher’s Murder Mysteries, he noted, but after a premiere on Acorn TV, local stations have “met with really good success” with the show.

Subscriptions have grown rapidly for three-year-old Acorn TV, which charges $5 a month or $50 a year. Just 12 months ago, it had only 25,000 subscribers. According to Penella, sign-ups have more than quadrupled due to exclusive streaming premieres of the sixth season of Doc Martin, new episodes of Jack Irish and the very last Poirot episodes, as well as the second season of Miss Fisher’s Murder Mysteries.

He anticipates more growth with the hiring of Matt Graham, senior director of award-winning PBS Digital Studios, to run Acorn TV. Graham, who started Oct. 20, declined to comment.

RLJ Entertainment wants to build Acorn TV into “the premiere destination” for British drama, with a deeper library than PBS, Netflix or Amazon, Penella said. Graham brings “expertise on how to reach audiences on digital platforms” but is also “a smart business person. We think he raises our skill set internally.”

For Eaton, the company’s goals to superserve British TV fans are problematic. “Our audience is potentially their audience on Acorn TV,” she said. “I think it’s very important for stations to be aware that the shows they’re buying are having a premiere on Acorn TV. At $5 a month, that can create a lot of money and a very potent force in the marketplace. There may come a point in the future where viewers have to decide whether to be a member of their local station or a subscriber to Acorn.”

By contrast, she said, the all-British digital channel WETA UK, which currently airs only in the Washington, D.C., metro area, may be seeking the same audiences but is not in competition for subscriber money.

That channel, launched in June 2012, has also grown quickly. Even without much advertising and promotion, it is drawing a .4 primetime rating, just shy of its three-year goal of a .5, said Kevin Harris, WETA’s v.p. and television station manager. The channel’s programmers go out of their way to avoid cannibalizing the broadcast audience for Masterpiece on WETA’s main channel by scheduling British documentaries and other non-drama programming during its Sunday and Thursday primetime slots. When ratings for those two nights are excluded from WETA UK’s audience data, its rating climbs to .7.

WETA UK benefits from a complicated dynamic with both Acorn and Masterpiece. Recently, for example, it bought from Acorn the rights to the mid-1970s BBC production Poldark (which also aired on Masterpiece). The vintage version will air on WETA UK in advance of an updated version of Poldark coming to Masterpiece in 2015.

While Harris doesn’t want to hurt Masterpiece, “Acorn for us is great,” he said. More synergies, which he declined to elaborate, are possible, he added, once the two sides have a chance to figure them out. Hamby returned the compliment, calling WETA UK a key Acorn customer.

Stations in other markets are interested in picking up the channel, Harris said, but “we’re not ready to go national.” Wider distribution would change the price of acquiring the rights and exacerbate the challenges of protecting Masterpiece. Still, “in my bones I think it can happen,” he said.

Some stations, including San Francisco’s KQED and New York’s WNET, have also embraced Acorn TV in another way; as part of their on-air fundraising, they offered viewers subscriptions to Acorn TV, which Acorn provided to the stations at a discounted price.

Meanwhile, Acorn’s Penella said the lines of conversation remain open with Masterpiece. “We continue to talk to them about new projects we have in development,” he said, repeating that Acorn benefits when more households see its content. “We are not just interested in growing Acorn TV,” he said.

When asked whether future deals with Acorn are possible given the streaming rights skirmish, Eaton said via email, “Ultimately we look to choose the best programs while balancing an interest in securing on-air and home entertainment rights.”

Correction: An earlier version of this article mistakenly said that KQED and WNET offered subscriptions to Acorn TV in connection with on-air fundraising around Being Poirot. WNET’s offer was not connected to the show.

Three of the five final episodes in the Hercule Poirot detective series, a longtime favorite on Masterpiece Mystery!, will debut in the U.S. next month as an on-demand series available exclusively through online British content distributor Acorn TV. Masterpiece’s Mystery strand will present the broadcast debut of two detective stories, The Big Four and Deadman’s Folly, July 27 and Aug.

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